Authors: Nicholas Institute for Environmental Policy Solutions and the Environmental Defense Fund
Many fisheries around the world are considered an economically underperforming asset—providing lower returns than they could be if more sustainably managed. This report, co-authored by researchers at the Environmental Defense Fund and the Nicholas Institute for Environmental Policy Solutions, introduces the idea of a blended capital approach to fill the all-too-common finance gap that may hamper recovery of many fisheries. The report describes the categories of investment required to attain fisheries sustainability at each stage of the recovery process, identifies where within this framework there is likely to be the biggest funding gap, and suggests possible approaches for philanthropic and public capital to leverage private capital to help fill the gap.
Authors: William A. Pizer and Xiliang Zhang
On December 19, 2017, China announced the official start of its national emissions trading system (ETS) construction program. When fully implemented, this program could more than double the volume of worldwide carbon dioxide emissions covered by either tax or tradable permit policy. Many of program’s design features reflect those of China’s pilot programs but widely differ from those of emissions trading programs in the United States and Europe. For that reason, the workings of Chinese national carbon market are both intriguing and unfamiliar to those experienced with western markets. This paper explains the design of China’s new carbon market, contrasts it with western markets, and highlights possible implications. It also presents research questions raised by the design.
Author(s): Sarah K. Adair and Franz T. Litz
Regional electricity markets—operated by regional transmission organizations (RTOs)—span multiple states and bring significant benefits to the electricity grid. States policies—such as renewable or clean energy portfolio standards or procurement mandates—have always helped shape market outcomes, but increasingly they are aimed at addressing perceived market shortcomings. Recent state policy actions to support new or existing resources in RTO markets have renewed attention to issues of RTO market design, including how RTO markets and state policies interact. Those actions, a rapidly changing electricity sector, and low electricity and capacity prices have heightened the urgency of calls for changes in market designs to address perceived inequities, such as market designs that fail to value certain environmental or reliability attributes. This primer is aimed at policy makers and stakeholders who seek an understanding of regional electricity markets and the effect of state policies on those markets as well as an understanding of recent market design proposals that are designed to address the RTO-state policies interaction.
Lead Authors: Heather Tallis, Barbara J. Merz, Cindy Huang, Katharine Kreis, Lydia Olander, Claudia Ringler
Ongoing economic, technological, and demographic shifts are altering the nature of today’s major, global issues and challenging us to rethink our past and current approaches to solving them. As our planet becomes more populated and prosperous, the demand for finite resources—such as water, energy, and food—are increasing rapidly. These trends escalate the urgency to find new ways of addressing persistent and growing challenges. But current research and policy systems inhibit integrated approaches to problem solving. Too often, the health, environment, and development sectors work independently setting narrowly defined objectives and failing to consider consequences outside of their own sector. A Call to Action for Health, Environment, and Development Leaders and a companion paper Bridge Collaborative Practitioner’s Guide: Principles and Guidance for Cross-sector Action Planning and Evidence Evaluation are aimed at increasing cross-sectoral focused on shared evidence.
Lead Authors: Heather Tallis, Katharine Kreis, Lydia Olander, Claudia Ringler
The health, development, and environment sectors increasingly realize that they cannot achieve their respective goals by acting in isolation. Yet, as they pivot to act collectively, they face challenges in finding and interpreting evidence on sectoral interrelationships, and thus in developing effective evidence-based responses. Each sector already uses some form of evidence-based research, design, and action planning, but methods vary, and ideas about the strength of evidence differ, creating stumbling blocks in the way of cross-sector impact. A new initiative, called the Bridge Collaborative, sets out to spark cross-sector problem solving by developing common approaches that the three sectors could agree to and use. The collaborative has focused on two linked areas of practice that could unlock cross sector collaboration: results chains and evaluation of supporting evidence. This document captures a set of principles identified and used by the collaborative, along with detailed guidance for creating comparable results chains across sectors and evaluating evidence from multiple disciplines in common terms.
Energy efficiency may be an inexpensive way to meet future demand and reduce greenhouse gas emissions, yet little work has been attempted to estimate annual energy efficiency supply functions for electricity planning. The main advantage of using a supply function is that energy efficiency adoption can change as demand changes. Models such as Duke University’s Dynamic Integrated Economy/Energy/Emissions Model (DIEM) have had to rely on simplistic or fixed estimates of future energy efficiency from the literature rather than on estimates from energy efficiency supply curves. This paper attempts to develop a realistic energy efficiency supply curve and to improve on the current energy efficiency modeling. It suggests an alternative approach based on saved-energy cost data from program administrators and explains the methodologies employed to create the supply curve. It illustrates this approach with results from DIEM for various electricity demand scenarios.
Author(s): William Pizer
This contribution to Science's Perspectives underscores the importance of work to update estimates of the cost of carbon dioxide emissions, a cost that pervades government policy making. It explains the efforts of an interagency group charged with improving estimates of the so-called social cost of carbon (SC-CO2)—the dollar value of damage associated with 1 ton of additional emissions—and hence its equivalent, the benefit of avoided damage. It explains that in 2017 a U.S. National Academy of Science panel recommended use of updated damage models that translate climate change into impacts measured against the baseline economic activity and population. An improved damage model architecture for the United States has produced new estimates: 3 degrees Celsius of warming would lead to a loss of ~2 percent of U.S. gross domestic product; 6 degrees Celsius of warming would lead to a ~6 percent loss. But the real value of the new model architecture is enhanced credibility for future benefit estimates built on it and the architecture’s capacity to incorporate new studies and additional economic sectors.
Author(s): Joseph E. Aldy, Marc Hafstead, Gilbert E. Metcalf, Brian C. Murray, William A. Pizer, Christina Reichert, and Roberton C. Williams III
This introduction to symposium essays in the Harvard Environmental Law Review describes the role of pricing carbon in contemporary climate change policy (with a summary of experience with carbon tax and cap-and-trade policies around the world) and points out similarities of carbon tax policies and cap-and-trade policies based on the academic literature. But it focuses on how a tax and cap-and-trade schemes differ in terms of their economic and emission outcomes in light of the uncertainty characterizing the markets and economies in which these instruments are used. These differences have potentially important economic, environmental, and political economy implications for U.S. climate change policy. Finally, the article highlights the proposals and key findings of each of the symposium essays, including Increasing Emissions Certainty under a Carbon Tax.
Author(s): Jonas J. Monast, Brian C. Murray, and Jonathan B. Wiener
This article in Law and Contemporary Problems explores the contrast between the movement toward environmental markets, characterized by the emergence of new carbon markets across the globe, and the renewed opposition to markets manifested in the pope’s encyclical and the views of some environmental advocates. It considers the arguments raised by these latter critics, explores alternative views of their concerns, and examines how market-based climate policies could be designed to alleviate these concerns. Others have examined the moral and ethical dimensions of market-based climate policies, but this article contributes to the literature by providing a contemporary examination of the papal encyclical’s prominent questioning of the use of markets to address climate change.
Author(s): Blair Beasley, David Hoppock, Jennifer Macedonia, Martin Ross, and Tracy Terry
In a new report, the Bipartisan Policy Center and Nicholas Institute for Environmental Policy Solutions explore the value, use, and limitations of economic modeling of the electricity sector. The report presents a suite of recent analyses by different organizations, showing how economic modeling can be used to simulate possible policy, market, and technology changes as the electricity sector transforms due to growth of domestic natural gas, increased use for electric generation, the rapid progress of renewable technologies, and environmental regulations. It is meant to be a guide for state policymakers who have both the benefit and challenge of unpacking modeling results and figuring out how best to learn from diverse findings. It provides them with both an understanding of how to best utilize economic models and interpret their results as well as explores key modeling structures often being deployed to model carbon regulations such as the Clean Power Plan and input assumptions that impact power sector modeling results.